Mexico agribusiness looks set for healthy growth

Subject

Agribusiness outlook.

Significance

The importance of the agricultural sector to Mexico has been underscored by the broad decline in the price of oil since mid-2014. While the oil sector accounts for a relatively small percentage of economic activity, revenue from state-owned oil company PEMEX remains a major source of government income. As such, the agricultural sector -- which includes the world's seventh-largest livestock sector -- has assumed more importance due to its position as a source of foreign currency and tax revenue.

Impacts

• Tighter regulations in Mexico could force Central American exporters to improve production standards.
• Government initiatives and the weak peso will see both exports and foreign investment in Mexican agriculture increase.
• Climate change will present worsening challenges for the sector with droughts and flooding becoming more common.